Financial Excellence

Intensified by the financial crisis as well as by sustained globalization tendencies there is an increasing demand for value-oriented management control systems allowing for an overview of the decisive activities within the company.

The advancing internationalization of accounting, increasing regulatory requirements, such as the decrees of the Sarbanes-Oxley-Act, Basel II and III, generally accepted principles of computerized accounting systems, the Act on the Enforcement and Auditability of digital documents, the liability to prepare an e-balance which will come into effect in Germany as of 2014, the 8th EU Directive will have to be observed both internationally and nationally. The compliance with these regulations is the basis of the company’s reputation and hence its brand.

The companies are challenged to redefine the function of accounting and to comply with increased information requirements. The compliance with these requirements is aggravated by heterogeneous systems and information which is distributed between decentral and central systems. This fact increases the incompatibility risk and the integration complexity of the different systems and thus aggravates a fast gathering of information.

Both value-oriented company information and the information on risks which serve as an element in the decision process and as an early warning system will have to be provided by the financial company sectors in their function as strategic partners in the center of the company’s management control. The financial sectors will have to ensure the compliance of the internal processes with the operative requirements and the strategic direction and are moreover responsible for the prompt combination of data and information for the company management and further interested parties.

A value-oriented management control requires the mapping of almost all operative processes in terms of value in ERPs.


Illustration: Real-time information basis & internal controls for the company with a coordinated flow of quantities and values

A company-wide requirement with regard to the quality of company data is to ensure Compliance and the correctness of the financial information and to have a risk management in place. The tasks of the financial sector will change and will consist in analyzing and supporting strategic decisions and in providing data for an increased information demand and/or more transparency.

A modern Financials supports the performance-management process in its value-oriented and risk-conscious decision-making processes and is able to map the aspects of interlinking in the global world as well as to integrate an internal control system in a proper semantic context – both with regard to its implementation in the system and from the organizational point of view. The mapping of the operative processes in one or more ERP Financials is the basis for these tasks.

On the one hand, a modern Financials optimizes transaction-driven processes and uses outsourcing and/or shared services. On the other hand, it has to centralize and automatize the planning processes, the reporting and risk management and thus ensures the real-real-time access to all relevant information.

The accruing vast data quantities can only be combined and processed real-time by means of an integrating IT. This will by far exceed the EXCEL solutions which are frequently used in this context.

In order to extract data from different decentral and/or operative ERP systems and to pass them on to a central unit, the “Business Rules“ are of decisive importance with regard to the gathering of information obtained from raw data of a sending ERP system and their transfer to a receiving central system. They provide an efficient and intelligent interface management enabling the transformation of heterogeneous previous systems into a homogeneous data basis.

The companies’ response to an aggravated competition is an increase of effectiveness and efficiency which is accompanied by streamlining the value-added chains. Accordingly, the company’s compliance strategy is integrated in all business processes, in all workstations, and also in the information policy.

Compliance-Strategy forms part of the Business IT Architecture


The efficiency or else the effectivity of the internal control system is a central aspect of Compliance and a value-oriented management control. The challenge is to create control and monitoring mechanisms which really penetrate the complexity of global international companies and banks. Internal controls aim at constraining the possibility of offenses and at finding answers to the following questions:


  • What can go wrong?
  • How is the risk controlled?
  • How is the efficiency of the operational processes ensured?

Illustration: „COSO Cube“: COSO Model on structure and evaluation of internal control systems

Guiding Principles

Big Data in combination with a framework for Intelligent Analytics and an integrated accounting system provide a basis ensuring financial transparency and integrity as well as an active risk management. The accounting system and an integrated coupled risk management make for a modern business performance management.

Risk management and compliance impose company-wide requirements on the quality of company data. Purely reactive measures taken by the data quality management will not be sufficient. What is required is the preventive guarantee of the data quality in the operative processes, in other words in the recording and administration of data. In this respect, a semantic integration architecture will be indispensible and should be in place at the latest in the business performance management and in group accounting. Group data should be centrally available and be captured via a service interface.

A company-wide uniform risk management is an integral part of the business IT architecture and provides a real-real-time currentness of risks, adapted to the dynamic market environment.

An important basis of a value-oriented management control is formed by an extended accounting system and/or an extended General Ledger within an ERP which maps the operative business processes as an information basis for the operational activities.

An integrated, uniform, and extendable external and internal accounting system maps the entirety of business transactions of the value-added chain in the journal and subsidiary books of account. In this reflection of the reality, IT-based operational processes always result in the generation and storage of transaction data (accounting records) in ERP systems.

Internal controls will have to be systematized by an automatized approach and should be included in the business objects of a business process in order to increase efficiency and cost-effectiveness in risk management.
A company-wide reporting system and control framework, in addition to the business processes, form the first level of standardization.

Further steps of standardization and/or harmonization will follow. The challenge in this day and age is to guarantee and monitor an overall integrity of compliance and efficient business processes via a proper semantic business platform architecture.

Overall Integrity of Compliance and Efficiency


The challenges presented to today‘s Companies

Efficiency and Compliance

  • Business Platform with internal Controls
  • Compliance by Design Overall Integrity in consideration of EXCEL’s Life Cycle